The U.S. Securities and Exchange Commission (SEC) has announced charges against a third partner in an investigation of Centra Tech Inc.’s $32 million ICO which was promoted by legendary boxer Floyd Mayweather.
The SEC earlier this month filed charges against the Centra Tech alleging that its ICO — which raised $32 million— was a fraudulent securities offering.
Unmasking The 'Mastermind'
In an amended complaint, the commission charged Raymond Trapani, a Centra co-founder, in the scheme, naming him the "mastermind." The SEC previously charged Sohrab Sharma and Robert Farkas, two other co-founders, for their roles in the fraudulent scheme.
The three went to “great lengths” to create the impression they had created a cutting edge technology, Robert A. Cohen chief of the commission’s cyber enforcement unit, said in the amended complaint. He said investors need to be cautious about investing in digital assets, particularly when they are marketed with claims seeming too good to be true.
Centra fraudulently claimed it had business relationships with credit card companies, used fictitious executive bios and misrepresented the company’s core financial service products, according to the amended complaint. Trapani and Sharma allegedly manipulated the trading of the tokens to drive interest in the company along with the token’s price.
Sharma, after receiving a cease and desist order from a bank instructing him to eliminate references to the bank in Centra’s marketing materials, texted to his partners that they needed to remove the references and should blame freelancers for the use of the references, the complaint states.
Trapani texted Sharma to create a false document to get the tokens listed in an exchange, to which the latter replied, “Don’t text me that s[***] lol. Delete.”
Securities Law Violation
The amended complaint, filed in federal court in Manhattan, claims Trapani violated the anti-fraud and registration provisions of the federal securities laws. The complaint calls for permanent injunctions, the return of allegedly ill-gotten gains, plus interest and penalties. It also calls for barring Trapani from serving as a public company officer or director and from offering securities.
In a related action, the U.S. Attorney’s Office for the Southern District of New York filed criminal charges against Trapani.
The SEC acknowledged the assistance of the U.S. Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, the Manhattan District Attorney’s Office and the Conference of State Bank Supervisors.
Centra Tech’s website states that it is currently under maintenance.
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